Citation:

Kamesh Tiwari, L.K. SINGH. "Retail Investors and IPO Subscription —Effect of IPO Size" International Research Journal of Economics and Management Studies, Vol. 4, No. 5, pp. 71-77, 2025.

Abstract:

This Paper, titled “Retail Investors and IPO Subscription” is an attempt to analyze the extent of IPO subscriptions in the retail investors’ category. In the study, the IPO subscriptions of 123 mainline IPOs floated in India during (2015-2019) have been considered to understand the trends in issue subscriptions in the different investor categories (NII, QIB & RII). Further, the year-wise as well as the overall (for the five-year duration) IPO subscriptions in the Retail Individual Investor (RII) category have been analysed using descriptive statistical tools in order to get a better understanding of the extent of over/under subscriptions of the IPOs in the retail investor segment. The findings suggest that out of the 123 IPOs that were open for subscription for retail investors, only 23% had been undersubscribed, whereas the remaining 77% were fully subscribed or oversubscribed. Furthermore, the findings pertaining to the Kruskal Wallis test suggest that the oversubscription significantly decreases for larger issue sizes, which is intuitive, considering that there is an investment limit of Rs. 2 lakh for retail investors in IPOs.

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Keywords:

IPO Subscriptions, Retail Individual Investor (RII), QIB, NII.